Sokon to boost capital at Jinkang New Energy to RMB 4 billion

Shanghai (Gasgoo)- Chongqing Sokon Industry Group Stock Co., Ltd (Sokon) will increase another RMB 3 billion to Chongqing Jinkang New Energy Vehicle Co., Ltd (Jinkang New Energy) with the subsidiary's registered capital increased to RMB 4 billion, according to Sokon’s announcement. After this capital increase, Jinkang New Energy will still be Sokon's wholly-owned subsidiary.

Sokon plans to raise capital of RMB 423 million by issuing convertible bonds and invest RMB 2.577 billion from its equity fund into Jinkang New Energy to build BEV (battery electric vehicle) program and develop vehicles featuring other new energy power.

According to the announcement, Sokon's capital increase in Jinkang New Energy is to ensure that its subsidiary will have adequate financing to develop electric vehicle businesses, which is in line with Sokon's development strategy and long-term planning.

However, Sokon, who let its wholly-owned subsidiary operate EV businesses, should bear the risk of quick-change policy amendment, fierce market competition, mismanagement and other uncertain factors. To win positive investment returns for shareholders, the parent company stated in the announcement that it will actively take the initiative to improve its risk control ability with the aim of locking out or handling the above risks.

Sokon announced on May 31 that the company will transfer its 100% stake in both SF Motors and Chongqing Jinkang Power New Energy Co., Ltd. (Jinkang Power) to Jinkang New Energy. 

Sokon stated that the adjustment on equity structure will help the company to systematically integrate the whole value chain system of intelligent electric vehicles, in accordance with the strategic deployment in the development of intelligent electric vehicles. Since the SF Motors, Jinkang Power and Jinkang New Energy are all Sokon's subsidiaries, the equity transfer is just an internal adjustment in Sokon.